I’m delighted to be able to speak once again at the BIA conference here in Cambridge … and I’d like to thank Hugo and Francesca for their kind invitation and for their warm welcome.

The BIA conference is a unique event in the political calendar … bringing together politicians, civil servants, and academics from across these islands to discuss issues of common interest and concern.

And this year is no exception.

Yesterday the Taoiseach spoke about the strength of the modern UK-Irish relationship.

And tomorrow my friend and colleague Charlie Flanagan will address you … with whom I spent many hours at the Stormont House talks.

But this evening I would like to give the UK Government perspective on the current state of politics in Northern Ireland … the causes of the present political instability and what needs to be done to get things back on the right track.

I start with where we were almost exactly a year ago when I last spoke at the BIA conference.

Then I said that Northern Ireland’s politicians faced two choices.

They could face the electorate in the 2016 Assembly elections against a backdrop of wrangling, paralysis and financial mismanagement … unable to deliver on the vital work of building a better future for Northern Ireland.

Or they could take the tough choices needed to make progress on divisive legacy issues such as flags, parading and the past, as well as putting their public finances on a sustainable, long term footing.

A few weeks later I gave my realistic assessment that the time had come for a fresh round of multi-party talks involving the Northern Ireland Executive parties and the Irish Government on matters for which they are responsible.

And during those long weeks of negotiations Northern Ireland’s politicians did rise to the challenge I had set out in my speech to the BIA.

The UK Government continues to believe firmly that the agreement reached at Stormont House on 23 December was a good deal for Northern Ireland.

It sets out a clear path to putting the Executive’s finances on a sustainable footing.

It offers a way forward on flags and parading.

It would establish broad ranging new institutions to help deal with the legacies of the past.

And it includes measures to help make devolution work better.

All of this is underpinned by a generous financial package from the Government … which would have given the Executive £2 billion of additional spending power.

In short the Stormont House Agreement still represents our best hope of building a brighter, more secure future for Northern Ireland.

But for that to happen it is vital that the Agreement is implemented faithfully and in full by all the participants.

The UK is committed to doing just that.

Just before Parliament was dissolved in March for the General Election we managed to get legislation on to the statute book enabling the devolution of Corporation Tax powers.

I am convinced that such a move could be an economic game changer for Northern Ireland, not least because of the land border it shares with a low corporation tax jurisdiction.

We are making good progress on the legislation we set out in the Queen’s Speech to establish the new bodies to deal with the legacy of the past.

We are on target to introduce the Bill at Westminster next month as planned.

So there can be no doubt that we are doing out bit.

The manifesto on which were elected commits us to working with all parties to ensure that everybody fulfils their obligations under the agreement.

That has to include all those elements that deal with the Executive’s finances … including welfare reform.

The UK Government’s position is clear and unequivocal.

We will not fund a more generous welfare system in Northern Ireland than in other parts of the United Kingdom. ….. There is no more money.

We have a duty to manage our finances responsibly.

Northern Ireland gets a fair deal from the UK Government.

In recognition of Northern Ireland’s unique circumstances, public spending per head remains 23 per cent higher than the UK average.

The block grant is actually higher in cash terms today than it was in 2010.

It has come down in real terms by only around 1% a year over the course of the spending review.

Spending per head on benefits is around £3,000 in Northern Ireland compared with £2,500 in Great Britain.

And of course people in Northern Ireland benefit from changes to personal allowances that are taking over 100,000 of the lowest paid out of tax and cutting tax for over 700,000 … and the introduction of the £9 an hour national living wage.

Controlling welfare spending … and reforming the system to reward work … is a key part of our long term economic plan.

These are not the ‘savage cuts’ our opponents try portray them as.

Even with the reforms we have made, UK welfare spending will have increased from £195 billion in 2010 to around £217 billion this year.

And by the end of this Parliament we expect the welfare bill to have risen to £222 billion.

Sustainable budgets

So this evening I want once again to urge the Executive to take action to repair their public finances.

That means dealing with the in-year pressures in their budget in the next in-year monitoring round …

… and it means implementing the welfare reform package agreed by the five parties during their Stormont Castle negotiations.

Without these two crucial steps, the budget agreed by the Executive in June just does not add up …. and we face the alarming prospect of the Executive breaching its control totals and starting to run out of money.

Those who continue to block welfare reform have a choice.

They can do what virtually every responsible government across the world has had to do in recent years … including in the UK and Ireland … and that is to make difficult choices to live within their means.

Or they can continue down a path of reckless irresponsibility … with the damaging consequences that will have for front line public services and the people who depend on them.

The Government is firmly committed to the full implementation of the Stormont House Agreement and the financial package that underpins it.

And we have come to the conclusion that if the Executive cannot reach agreement on implementing the budget and welfare aspects of the Stormont House Agreement, as a last resort the Government will have to step in and legislate at Westminster for welfare reform in Northern Ireland.

We would do so reluctantly, and only if we had exhausted all the realistic alternatives.

But we cannot stand by and let this situation drag on indefinitely with Stormont becoming less and less able to deliver crucial public services.

If this situation is not resolved, then there will be increasing pressure on health, policing and other front line services as departments start to run out of money.

The people who will suffer as a result include some of the most vulnerable in our society and in those circumstances, the Government would be left with no choice but to act.

I believe that with determination, it is still possible for the parties to resolve these matters themselves and avoid this.

Continued cross-party discussion could and should identify a way forward which would remove the need for the intervention I have outlined.

Over the coming days, we will focus with single minded determination on securing that cross-party resolution both on welfare and on all aspects of implementing the Agreement.

I can also announce this evening that we will take steps to ensure that another key element of the Agreement will proceed.

We recognise the pressing need for public sector reform in Northern Ireland.

We therefore believe that the voluntary exit scheme for public sector workers contained in the Agreement must go ahead.

So I can announce this evening that we will release the funding to enable the scheme to come into operation this month as planned.

Paramilitary organisations

But as everyone in this room will be well aware, the impasse on welfare and the stalled implementation of the Stormont House Agreement is only one of two sources of major political instability in Northern Ireland today.

The political fall-out from the recent murders in Belfast has once again highlighted the pressing need to see and end all paramilitary organisations and paramilitary activities in Northern Ireland.

I am not going to comment on the specifics of the Kevin McGuigan case.

It is essential that the PSNI are allowed to pursue their lines of inquiry without fear or favour and bring the perpetrators of that murder to justice … along with whomever was responsible for the killing of Gerard Davison.

So let me be clear where the UK Government stands on this.

There should be no place for any paramilitary group in a democratic society such as Northern Ireland.

In the Government’s view politically motivated violence in Northern Ireland … from wherever it came … was never justified.

Paramilitary organisations were responsible for huge levels of suffering inflicted during the Troubles.

They left thousands of people devastated by bereavement and loss, many of whom live with the devastating consequences to this day.

Terrorist groupings should never have existed in the first place … and they should not exist now.

That includes the Provisional IRA, UDA, UVF, and the so-called dissident republicans, and any groupings that seek to control their communities through violence, gangsterism and criminality.

Be in no doubt.

This Government believes fundamentally in the rule of law.

We will not compromise it.

Where there is evidence of paramilitary activity … or membership of an illegal paramilitary organisation … it will be pursued by the police.

And we will stand fully behind the Mitchell Principles of democracy and non-violence which are such a fundamental tenet of the political process in Northern Ireland.

The principle that only parties committed to pursuing their objectives by exclusively democratic means can participate in Northern Ireland’s political institutions remains paramount.

I believe that all the parties in the Northern Ireland Executive are committed to these principles and to the Pledge of Office which they have to take before they can become ministers … including support for the police and the rule of law.

But I am also aware that assessment of the Chief Constable … which I fully share … regarding the continued existence of some PIRA organisational structures has caused grave concern …

… as have the criminal activities of individuals associated with so-called loyalist paramilitary organisations.

So that is why, after discussions with the Irish Government and the Northern Ireland parties, we have moved swiftly to convene a new talks process to grapple with these two very serious challenges

… to secure the full implementation of the Stormont House Agreement … and to consider with urgency the issues arising from the continued existence of paramilitary organisations from whichever side of the community they come.

I want that process to start without delay … and to be both focused and intensive.

And that is why invitations have gone out to the Northern Ireland’s five largest political parties to come back to Stormont House on Tuesday to join me and Charlie Flanagan as we seek a way to ensure paramilitary groups disband once and for all and become a feature only of Northern Ireland’s past and not its present or its future.

Conclusion

Because let’s be honest.

It doesn’t have to be like this.

There is so much to celebrate in today’s Northern Ireland.

Our long term economic plan is working … with over 30,000 more people working today than five years ago.

Northern Ireland plays host to over 800 international companies employing more than 75,000 people.

We have a number of world beating companies of our own exporting across the globe.

Once again this year our GCSE students outperformed counterparts in England and Wales.

These are just a few examples that offer a glimpse of the positive side of life in today’s Northern Ireland.

The Government elected on 7th May is a One Nation Government.

We want to bring the country together … and that is no less an ambition in Northern Ireland than anywhere else in the UK.

We want to build a Northern Ireland where politics works, the economy grows and society is stronger and more united.

So just as they did when I last addressed this conference … Northern Ireland’s leaders stand at a cross roads facing two alternative futures.

One future that sees the devolved institutions increasingly dysfunctional and discredited … limping purposelessly to the next Assembly elections amidst and ever increasing levels of acrimony.

Or another that sees all parties working together to resolve the current causes of instability with a renewed determination to build a brighter, more secure future for Northern Ireland.

The UK Government firmly hopes that it is the second of these courses that prevails … and, as always, we will be striving ceaselessly in the coming weeks to achieve that goal.